Empire drags PartyGaming to court over ''skins'' issue |
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Tue, 06 Dec 2005 20:05
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LONDON - Online gaming company Empire Online Ltd has announced that it will be suing former ally PartyGaming PLC, for substantial damages over the latter's decision to segregate its main site from its "skins." The suit was initiated today in Gibraltar High Court.
Empire was a skin site of PartyGaming in that it directed customers to the latter's Party Poker site. In doing so Empire earned a substantial commission. Cyprus-based Empire Online has lost more than half of its revenues since it was floated on the market in June. PartyGaming, which is based in Gibraltar, has earlier warned that the online gaming market was leveling off and that there were tough times ahead.
"The company seeks substantial damages and injunctive relief from PartyGaming," Empire said in a statement. Under the terms of the previous agreement, players on the skin sites had the option of playing across communities. Such activity was brought to a halt by PartyGaming's decision to separate its own players from players of the skin sites. It is understood that Empire wants this agreement to be reinstated.
Since October, Empire has been struggling with its revenues and had issued a warning that profits could be hit by as much as 10 percent. Empire claims that PartyGaming broke a contract by switching over from the skin sites. This claim is hotly denied by PartyGaming, "I note that Empire put pantomime tickets up for sale this morning and I won't be buying any," said company Spokesman John Shepherd. "We remain highly confident of a successful outcome to the litigation with Empire,"
Empire, the brainchild of Israeli entrepreneur Noam Lanir has been a takeover target of European rival Sportingbet, which had offered £790 million. PartyGaming also attempted to takeover Empire, but these bids also fell through.
Empire shares increased by 0.5 pence to 71 pence, while PartyGaming shares fell 2.25 pence to 115.5 pence in early morning trading.
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PartyGaming is consolidating with acquisition of two 'skins' 